Monday, January 21, 2008

If I Ran the Circus

As a starting point for my policy ideas, I'll refer back to this post, which posits the need for ideas in four areas of fundamental change. Here they are, complete with policy ideas.

Energy.

It's essential, as a matter of national security, to collapse oil prices within 15 years. Because oil is fungible, domestic drilling simply can't do this. Only an economy that simply doesn't need very much oil will do.

Enact carbon taxes. These are needed for climate change purposes but they're even more important to reduce dependence on oil. They're less prone to fraud and rent-seeking than cap-and-trade. Taxes should start fairly low but escalate to meet internationally negotiated caps within fifteen years.

Make a small number of big bets in basic research. I think there are 5 of them to be made:

Cellulosic methanol, ethanol, or butanol. (Corn and sugar alcohols are unsustainable and should be de-emphasized immediately.)

Battery and ultracapacitor technology.

Power grid technology that will work for highly distributed, low-power electricity sources (e.g., from rooftop solar arrays), and which can utilize the batteries from plug-hybrids as a load-leveling device.

I'm not a big fan of increasing CAFE. Seems kinda silly to spend 60% of the effort on 30% of the problem.

Streamline the application process for new nukes. Force somebody to cut bait on a nuclear waste disposal site or sites.

Dealing with non-state actors.

Hang in there on Iraq. Maintain a presence, but turn things over to the Iraqis in a conservative fashion.

Escalate Afghanistan, subject to forces coming available.

Soft-land Pakistan, but do it in a way that we can get at Waziristan. If Pakistan goes sideways, secure the nukes and raid Waziristan as much as needed to eliminate the threat to Afghanistan.

Spin up ten more brigades of light counterinsurgency troops.

Less moral purity, more carrots and sticks to outflank Iran and ensure that they don't get nukes.

Engage in aggressive, extra-legal counter-terrorism and intelligence gathering. Aggressively prosecute the Guantanamo cases in an effort to clarify the new legal framework for handling terrorists and other non-state actors.

Competing in an open, global economy.

Reinstitute statutory pay-as-you-go, a la Gramm-Rudman. Budget to run a moderate surplus and use it to pay down the national debt to 50% of GDP. Raise top-bracket income taxes to 39%. Maintain capital gains tax rates but increase the taxes on dividends.

Veto a lot of legislation.

Continue to liberalize trade.

Continue to push China on the yuan.

Otherwise, leave the damn economy alone.

It's clear we haven't found the right magic incantation on education. The worker of the future will need a decent general education but will need to be able to learn niche specialties very quickly and at low cost. Training kids to learn like this and then providing the course ware that's necessary to do the learning are essential and have nothing to do with what we'd call "school" right now. There's not a lot that government can do to be creative in this area but it can foster and support creativity coming up from the bottom. This requires pulling the teeth of the educational establishment, which has a lot to lose and will try to quash any innovation that threatens it.

Maintain the status quo on illegal immigrants already in the country. Enforce the borders. This isn't a moral solution but it's a practical one. Everybody can agree on border enforcement and we need the illegal population to keep the low end of the labor market liquid. I'd have no problem with offering amnesty for those already in the country if it were coupled with a relaxation in labor and wage restrictions. Since that's impossible, keeping illegals illegal seems to be the best compromise. If that's coupled with a dramatic increase in legal immigration quotas for Mexico, the problem is manageable and goes away over time.

Enhancing the quality of human life.

First, let's acknowledge that there's a limit on how much we're going to spend to prolong an individual's life. We're entering an era where human life is somewhat elastic, allowing increasing life extension for however much you're willing to pay. Our society simply can't afford to pay for everybody.

Make insurance for insurable events only, with reasonable deductibles, but provide guaranteed enrollment. Require enrollment, at minimum, in a high-deductible insurance program for everybody, but prevent switching policies for a fixed amount of time after somebody gets sick. This seems to be the only way to manage the cost of policies. Otherwise, healthy people will wait to get sick before they enroll, which drives costs up for everybody else.

Emphasize uninsured, routine care at low cost. This is an area where private enterprise could flourish if we eliminated the guild restrictions imposed by the medical community. There's no reason why skilled workers who aren't doctors can't treat ear infections, broken bones, high blood pressure and cholesterol, vaccinate children, and so on. We need to remember that the vast majority of medical care in the US is incredibly cheap and take advantage of that in our health care system.

Subsidize low-income people so they can afford catastrophic insurance and routine medical care.

Hands off the abortion debate. Same with the gay marriage debate. These are simply going to have to wait for consensus to emerge from the society. It'd be lovely to get the courts out of the debate so that consensus could emerge, but that seems unlikely. These issues need to leave the national stage--they're distracting us from the real issues.

And that's it for policy agenda.

But what about the economy? Presidents can't manage the economy. They can assert leadership and act to calm their citizens. They can enforce budgets. That's it.

How 'bout foreign policy? They can set strategy but the actual conduct of foreign policy doesn't require an agenda. It requires a clear-eyed view of the world and the ability to improvise. The world is an unpredictable place. The last seven years have proven that a dogmatic approach to foreign policy is a disaster.

The missing element, which a policy agenda can't capture, is leadership. A president needs to communicate, to explain. A president needs to be honest, even to his own political detriment. The act of explanation is, in fact, the act of unification. If you can get enough people to understand what you're trying to do, they'll give you some breathing space to do it. This won't cause us all to join hands and sing "kumbaya" together. But it will result in effective, competent government. That would be an improvement.